Published: Sat, February 04, 2017
Research | By Elizabeth Houston

Macy's Inc (M) Stock Spikes on Sale Rumors

Cincinnati, Ohio-based Macy's has around 900 stores in the USA, which includes its Bloomingdale's outlets and its flagship store in New York City's Herald Square.

Talks between the companies are at a preliminary stage and also encompass other ways they could cooperate, one of the people said, adding that a deal for only Macy's real estate is also a possibility.

Besides its eponymous department store in Canada, Hudson's Bay also owns and operates Saks Fifth Avenue and Lord & Taylor. The paper also said there was no certainty anything would come of these talks.

Hudson's Bay has been eager to expand its footprint in the U.S.However, Macy's would be a challenge for Hudson's Bay to absorb. The company had a market cap of C$1.82 billion (US$1.40 billion) as of Thursday's close. In fact, in the same note, Chen listed Hudson's Bay as the most straightforward of acquirers, though it's debt "could make a full transaction prohibitive".

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According to these rumors, Macy's Inc CEO Terry Lundgren is looking to sell the company to a friendly buyer. Ahead of this latest rumor, Macy's market capitalization was almost $10 billion, while Hudson's Bay was about $1.7 billion. It was then when the Canadian retailer acquired Saks Fifth Avenue for $2.9 billion.

Activist investor Starboard Value held around 1 percent of Macy's stock as of September 30 past year, making it the company's 15th largest shareholder.

In 2015, Smith said that the company's real estate was worth more than $20 billion alone.

Shares of Macy's have jumped 6.8% to $32.81 at 12:24 p.m. today, and even provided a lift to Nordstrom (JWN), which gained 1.9% to $44.28, and Kohl's (KSS) rose 1% to $40.19.

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